1.
To calculate: The gross margin percentage for each of P’s three market segment.
Given information:
2014,
Revenues from general supermarket segment are $3,708,000.
Gross margin from general supermarket segment is $108,000.
Revenues from drugstore chains segment are $3,150,000.
Gross margin from drugstore chains segment is $150,000.
Revenues from m-and p single stores segment are $1,980,000.
Gross margin from m-and p single stores segment is $180,000.
2.
To compute: The cost driver rate for each of the five activity areas
Given information:
2014,
Total cost of order processed activity is $80,000.
Total quantity of cost driver of order processed activity is 2,000 (working notes).
Total cost of line item ordered activity is $63,840.
Total quantity of cost driver of line item ordered activity is 21,280 (working notes).
Total cost of store deliveries made activity is $71,000.
Total quantity of cost driver of store deliveries made activity is 1,480 (working notes).
Total cost of cartons shipped to stores activity is $76,000.
Total quantity of cost driver of cartons shipped to stores activity is 76,000 (working notes).
Total cost of shelf stocking activity is $10,240.
Total quantity of cost driver of shelf stocking activity is 640 (working notes).
3.
To calculate: Allocation of $301,080 of other operating cost to the three segment under the activity based costing system and to compute the operating income of each market segment.
Given information:
Cost driver rate for order processed activity is $40
Number of order processed for General supermarket chains segment is 140.
Number of order processed for Drugstore chains segment t is 360.
Number of order processed for Mom-and-Pop single store segment t is 1,500.
Cost driver rate for line item ordering activity is $3.
Number of line items ordered for General supermarket chains segment is 1,960.
Number of line items ordered for Drugstore chains segment is 4,320.
Number of line items ordered for Mom-and-Pop single store segment is 15,000.
Cost driver rate for store deliver activity is $47.97.
Number of store deliveries made for General supermarket chains segment is 120.
Number of store deliveries made for Drugstore chains segment is 360.
Number of store deliveries made for Mom-and-Pop single store segment is 1,000
4.
To comment: The new insights are available with activity based costing system.
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